Tax collection surges as surplus grows

Despite signs of slower economic growth, state tax revenues are still strong. The Finance Ministry on Thursday reported a NIS 1.6 billion surplus in tax revenues for May, bringing the cumulative surplus since the beginning of the year to NIS 2.7b.

The Israel Tax Authority is reporting a spurt in imports of vehicles and consumer products to Israel. Surging private consumption and the relatively strong shekel, which have contributed to the import boom, are responsible for the large surplus in tax revenues, despite sliding exports of goods and services. For example, taxes on imported vehicles alone added NIS 630 million in tax revenues in May.

Tax Authority figures show that imports of private vehicles soared 75% in May, compared with May 2015. Imports of commercial vehicles surged 114%. The Tax Authority attributed some of the meteoric rise in vehicle imports to the release of vehicle inventories to auto-leasing companies and special bargains they offered. Another cause was the low shekel-dollar exchange rate during most of May.

Cumulative vehicle imports since the beginning of the year totaled 132,136, up 65% compared with the corresponding period last year.

The import trend for electrical and electronics products in May was mixed. Refrigerator imports jumped 55%, but imports of washing machines were down 17%. Imports of clothes dryers climbed 93%, while imports of dish dryers sank 21%.

Imports also rose for entertainment electronics products, including televisions (81%) and videos and DVDs (38%).